Ep131[2/3,5/6] John Harvey on exchange rates and neoclassicism [guest host: Johnathan Wilson]

Welcome to episode 131 of Activist #MMT. Today's part five of a six-part series with Texas Christian University (TCU) economics professor and Cowboy Economist John Harvey. Parts four through six are also the first main interview of Activist #MMT hosted by someone other than me. Today's guest host is my own former guest, MMT researcher, Texas lawyer, and pmpecon.com author, Jonathan Wilson. Jonathan and I spoke in episodes 106 and 107. (A list of the audio chapters in this episode can be found at the bottom of this post. Here's a link to part one in this six-part series with John, which contains a link to all other parts. For a link to every Activist #MMT interview with John – plus the full audio of every Cowboy Economist video – go here.) Today in part five, they continue their conversation regarding exchange rates from different points of view and in different contexts. In the second half, John gives his extended thoughts on a recent critique of MMT by Drumetz and Pfister. Next week, they focus on some of the core assumptions and ideology of mainstream economists. They also discuss how some assume inflation to always caused by too much demand and too high wages, despite clear empirical evidence that it's caused by something else. You'll find links to many resources, as mentioned by John and Jonathan throughout these three parts, in the show notes to part four, which is the first with Jonathan. But for now, let's get right back to Jonathan's conversation with John Harvey. Enjoy. Audio chapters 5:19 - Currency markets are driven by financial capital flows, not trade flows. 8:27 - "I feel like a liar when I talk about the mainstream theories of exchange rate." 11:35 - How crises made it into John's textbook and class 13:44 - 1990's Mexican and East Asian currency crises 17:38 - If Mexico had more advanced industry at the time of the crisis, could it have done differently? (Brazil and capital controls) 20:58 - Ilene Grabel's books and concepts 22:17 - Russian interest rates and hot money, versus unsustainable returns for crypto 25:27 - The game of musical chairs 28:37 - Turkey and becoming stuck with short-run strategies 30:55 - Is it harder to build a cold money economy, or boot out the IMF from a hot money economy? 34:45 - Barney Miller and revolution, and bouncers who check facial structure 38:52 - Jamie Galbraith's bi-annual conference at the university of Texas 40:12 - Drumetz and Pfister MMT critique - the setup 41:20 - How John learned about MMT 44:17 - Initial comments on Drumetz and Pfister- tone and rhetoric 46:15 - Drumetz and Pfister- unstated assumptions 47:16 - Drumetz and Pfister- what they get right about MMT (and try to present as an indictment) 54:20 - "MMT doesn't do any formal modeling" - General equilibrium modeling 56:30 - Simultaneous equations can't model time 1:10:39 - What if the price of diamond jewelry goes up? Should we care? 1:15:27 - Duplicate of introduction, with no background music (for those with sensitive ears)